All Forum Posts by: Jonathan R McLaughlin

absolutely agreed on the get it in writing. We had it written explicitly into our commitment letters with two different small to middle regional banks: portfolio loans, good customer, ongoing business. Descending prepay unless refi loan with them or sale of property.

great posts and working through the math, thank you all. This may be oversimplifying or I may have missed it, but did you factor in the negligible risk rate for your 100K right now? 

High yield savings account or CD or treasuries at close to 5%, so over the 4 years you have at least the 25K opportunity cost as a base case...

markets don't go up or down evenly...even if you are right about those declines (big if) "across the board" your area may gain or retain value significantly better than the next etc. 

And if you buy with some equity, get paydown and add value somehow you'll be fine. I would say spend less time worried about macro conditions and more about target areas.

Oh, and what is happening to everything else if real estate declines 50%?

usually there is no prepayment penalty if you refi with the same bank, confirm.

Just a quick visual scan...

when I see the 3 big numbers in boxes (purchas, pro forma, anticipated) I immediately go..."who how is he getting from 1.5 to 2.8? Lead me to the water, don't make me go searching in the small print without the big picture

Assuming this is value add and you want to keep that format I would have another box along the lines of "total outlay" including rehab, holding costs etc. this can all be broken down later.

@Justin Turpin yes these are definitely questions for him. He knows you don't know, and I think he will respect you for not trying to pretend. Do your own research like you are doing now as you ask him.

Ask him to walk you through one of his deals. Ask if you can read one of the contracts. Ask what were the pain points of his relationship with the investor. Ask, ask, ask.

Good luck. Trust but verify but it sounds like an incredible opportunity and well worth pursuing.

if the state doesn't let you mandate it, I would do all of the above. Send note and link that says  as long as deposit is initiated by the first payments will be considered on time and given a 3% discount. Payments through other methods must be received by midnight on the first and then whatever the strictest late fee policy you can do.

And if it really is a royal pain don't renew if they don't

@Sunny Karen sounds like a great plan and very workable. A couple of thoughts:

1) I would probably opt for 30 year and paying more than you have to for the emergency flexibility you mention. It is a long time till kids college. What if you lose the W2. You want this to be truly self-sustaining, yes?

2) Not sure what the loan structure is, but you may want to make sure you can separate the properties easily if you want to sell one.

3) Consider putting down just slightly less (in combo with above?) and keeping an emergency fund in a liquid high yield account...you mentioned not being able to cover a big emergency.

4) I would look into life insurance/upping disability policies for you and your husband if you don't have already timed around the mortgage. Terms are incredibly cheap and its an added layer of protection

5) Consider channeling some of the positive cash flow from these into 529 plans for the kids. A good accountant could let you know how much of a benefit that could be. If you find yourself wanting to sell early each of you is able to fund those 5 years in advance at 15K a year each. So that could be a powerful tool

6) Consider the future potential of condos in the duplexes...not sure of the way your market works, but the world is kinda going that way. The ability to condo would allow you even more flexibility to sell pieces. You could even consider doing the docs now, etc. 

7) keep an open mind about the tactics of selling/exchanging early. 15-18 years is a long time, and you will be near the end of the baby boomer bubble. If you find yourself with a great deal of equity, you may want to capitalize on it. Strategy and goal can remain, but tactics can shift.

next time you drive by and see the door open, call the police and ask them to swing by for a wellness check. Could accelerate things.

Kinda not really kidding.

@Billy Cowell search here for "guru" offerings and you will find they are all the same. coaching, inner circle upgrades, a method, mentorship....blah blah blah. The names change but the methods don't. Some might even offer actionable insights if you have money, though all the info can be found for free.

They are about as scammy as something (usually) legal can be.